On Friday, March 23, the State of Florida released that it signed into law a reduction to the UI wage limit effective retroactively to 1/1/12. The reduced wage limit is now $8,000, down from the prior limit of $8,500. DirectPay is in the process of updating our system to accommodate the amendment.
What is an Unemployment Taxable Wage Base?
As an employer, you are required to pay “x” amount of taxes for the first “x” amount of employee wages. This applies to FICA, State Unemployment (SUI) and Federal Unemployment (FUTA). However, for purposes of understanding SUI wage base, we will used Florida’s wage base as an example.
An unemployment rate is determined each year by the state. If you are a Florida employer, and your 2012 SUI rate is 2.7% you are required to pay employer only taxes on the first $8,000.00 in wages. Once an employee’s wage base of $8,000.00 is reached, you are no longer required to contribute employer SUI for the remainder of the year. Your total SUI contribution per employee reaching the $8,000.00 wage base in this scenario would be $216.00.